The Hindu Business Line : Margins will go down this quarter: Mahindra

Mumbai, July 25 The Mahindra & Mahindra Automotive Sector President, Dr Pawan Goenka, predicts a short-term downturn for the auto industry as margins are under pressure due to increase in input cost, fuel price and inflation. “Margins of all companies will definitely go down in this quarter,” he said.

Mr Goenka also hinted at the signs of downtrend in vehicle sales too. “Vehicle sales in May and June were not so bad. But sales in July are very critical for us. It will be out in a week’s time,” he said.

About inflationary trends he said, “We are able to absorb part of its impact. But we cannot absorb it fully.” He also said price hike is not an option to wriggle out of this tough situation. “Big price hike is not possible at this point of time,” he said.

He said the company had to defer some of its launches due to unfriendly market environment. Mr Goenka, however, said the multi utility vehicle from Mahindra stable, Ingenio, will be launched “between now and the year end”. He hoped that the cooling down of fuel prices would bring some respite to the auto industry.

On the fuel efficiency front, he said “We have completed our work on bio diesel-ready vehicles. The latest version of Scorpio that we launched recently can be run on bio diesel. We have also launched electric three-wheeler.”

Mr Goenka said the company do not have immediate plans to launch hybrid variants.

“Work is already on. We may launch hybrid vehicles by the end of 2010,” he said.

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